BIA Advisory Services forecasts automotive ad spending in local markets will hit the gas in the coming year, as interest rate cuts may encourage more people to head to dealer showrooms in the coming months. BIA forecasts $12.5 billion will be spent across all local media in 2025 from the automotive market, a 4.7% increase from this year when it expects spending to total $12 billion. If accurate, it will also top the $12.3 billion spent on local advertising in 2023, before higher interest rates and a sluggish economy overall led many potential buyers to stick with their current vehicle.
“If you haven’t noticed, it is a political year, so you get to enjoy a lot of political ads. But it takes up a lot of ad inventory, and that’s why we see a little dip in 2024 in automotive spending,” BIA Managing Director Rick Ducey said. “But we see that coming back up next year.”
Broadcasters would be well-advised to lean into their digital assets as they approach local auto advertisers. BIA says of the money being spent in the coming year, a majority 56.8% will go toward digital channels. Radio is expected to capitalize on that. The firm estimates that 2.4% of the $12.5 billion being spent this year is going to radio’s digital products. That totals about $300 million. Another 8.7% is expected to be spent on over-the-air radio, which would be worth $1.09 billion. Combined, BIA estimates radio will have an 11.1% share of local ad dollars spent next year. That totals $1.39 billion worth of advertising dollars based on its 2025 spending estimates.
Ducey said during a webinar last week that local auto dealers have quickly warmed to connected TV. The digital video services are predicted to grab an estimated 2.9% share of ad spending next year, which will make auto advertising CTV’s third-largest source of revenue. “The auto buyers love connected TV, they love digital, and they’re all the big spenders in the marketplace,” he said.
BIA data also shows that mobile has a growing share of the budget, with 18.6% of total ad spending next year going toward mobile ads. That is nearly as much as over-the-air TV, which still has the biggest share overall at 19.7%.
It is not just car dealers that are spending, so too are the aligned auto repair and tire and parts businesses. Both segments are predicted to invest more in advertising next week. BIA forecasts auto repair shops will spend $721.4 million in 2025, up 6% from this year when it saw a slight pullback in marketing. Tire and parts retailers are forecast to spend $220.9 million in 2025, up 1% year-to-year.
BIA forecasts radio, both over-the-air and online, will get about $75 million from auto repair advertisers next year, which is roughly on par with what television stations get. Ducey said repair and tire retailers are much more focused on reaching people with desktop and mobile ads.
Overall, he said there is not much variability year-to-year in what the auto repair segment spends on advertising.
“It’s pretty consistent,” he said. “The takeaway here is, if your car breaks, you pretty much have to fix it.”
Comments